Good Guys founder returns to the helm

Wendy Tanaka, OF THE EXAMINER STAFF

Published 4:00 am, Friday, June 4, 1999

The original Good Guy is back.

Ronald A. Unkefer will again take the helm of the Brisbane-based consumer electronics retailer he founded 26 years ago. But this time around, he'll be in charge of saving the chain, which has been losing money since 1996.

Last year, The Good Guys, which has 79 stores in California, Nevada, Oregon and Washington state, posted a loss of $8.9 million on sales of $929 million.

The company's stock has also been in the doldrums. On Thursday, it closed at $5.25, up $1.38 from the previous day on the Nasdaq exchange. Despite the increase, which came on news of Unkefer's return, Thursday's price is a far cry from The Good Guys' all-time high of $29.25 in 1991.

Unkefer, who will begin his post as the company's chairman and CEO July 1 and is taking a 10 percent stake in The Good Guys, said his first priority will be to beef up profits.

"I'm going to restore it to its glory days," Unkefer said Thursday in a phone interview from Dallas, where he's been chairman of a venture capital firm, First Ventures, the past 2-1/4 years.

"The company is still positioned well," he added.

"Sales have not gone down. The customer base is still here."

Unkefer said he doesn't yet have a specific plan in place to grow profits, but he's considering a reorganization of the company, a strategy that would stock the stores with new, higher-end electronics, or a combination of both approaches.

"There may be opportunities within the company," Unkefer said, "perhaps more clearly differentiating us (from competitors) and revisiting how the company functions inside. By July, when I show up, I'll have a clearer plan."

Unkefer, considered by some industry experts as a master marketer, said he'll definitely strengthen The Good Guys' marketing efforts.

"The Good Guys has enjoyed the upper-end niche of the market," he said. "We have to make that point clearer."

Once the company becomes profitable, Unkefer said The Good Guys will launch a "monster Internet site," where customers can buy products online.

Unkefer replaces Robert A. Gunst, who resigned in April after serving as the company's CEO since 1993. Prior to becoming CEO, Gunst, who had been with The Good Guys a total of 13 years, was CFO.

Unkefer left The Good Guys in 1996 to pursue a career as a venture capitalist. To date, he has invested in eight high-tech start-ups, including Redwood City-based InfoGear Technology Corp., a small company that makes phones with mini-computer screens for Internet access.

Unkefer wouldn't comment on the financial problems at The Good Guys, but analysts said the company has suffered from a dearth of new product offerings and growing competition.

The Good Guys has "a lack of new product introductions, and they've shifted toward more commodity products," said Annie Erner, an analyst at Fahnestock & Co. in New York. "So you can buy them at Wal-Mart as easily as a consumer electronics retailer."

Lewis Alton, managing partner of San Francisco investment bank L.H. Alton & Co., said other retailers, particularly Circuit City and Best Buy, have taken away market share from The Good Guys, which was once the dominant retailer in the Bay Area.

"The Good Guys has been in the cross-fire of Best Buy, Circuit City and Fry's, to some degree," Alton said.

Despite these problems, Alton was optimistic about Unkefer's return.

"Ron has charisma," Alton said. "Of all the people I've known in this business, Ron would have a chance. Gunst is really a CFO and should never have had the helm. The difference between being a CFO and a good marketing guy is figuring out what customers need and how to get it to them." &lt;